ERP stands for Enterprise Resource Planning. In a nutshell, we define an ERP as a solution that integrates all the processes you use in your company. Think for a few seconds about all the systems you are currently using. Chances are you have one for order and inventory management, one for human resources, one for accounting, etc. Wouldn't it be great if these systems could communicate with each other and automate tasks? That's what ERP systems do and we want to show you with examples.
ERP software uses a centralized database to store information from all departments and runs integrated software, so everyone has access to what they need, regardless of their assigned business function.
What makes ERP so complex is that the way it is used in company A, will not be the same as the way it is used in company B. Each implementation is highly customized to the needs of the business, so there are wide variations from industry to industry and company to company.
Examples of the use of an ERP by Area
With any ERP you can choose to integrate any or all of the modules listed below, depending on your needs. Here are some examples of how an ERP can be used depending on the department in which it is used:
Inventory management: Also known as materials management, the inventory module helps measure stock targets, standardize replenishments and track items through serial numbers.
Purchasing: This module manages procurement processes and works closely with the inventory module.
Sales and Marketing: These modules manage sales workflows, ranging from inquiries and quotes to orders and invoicing. With more advanced implementations, it is also possible to track shipments.
Manufacturing: Also known as Production or Engineering, this module aims to streamline manufacturing. It includes product sales planning and forecasting, daily monitoring of production, etc. It is integrated with the inventory module.
Financial Management: This module manages capital, giving you a clearer view of the money flowing in and out of the company. It covers standard accounting transactions, including expenses, balance sheet, tax management, bank reconciliation, etc. It can also generate financial reports for any department.
Customer Relationship Management (CRM): Aims to improve customer service and ARPU. It manages leads, incidents and customer opportunities. Within ERP, it works closely with the sales module to accelerate conversions.
Supply chain management (SCM): This module covers the supply chain, including areas such as purchase order management, process automation and production flow until the item reaches the customer, and vice versa in the case of recalls or returns.
Human resource management (HR): This is personnel-oriented and includes elements such as timesheets, employee records, performance appraisals, payroll systems and job profiles.
Automated reporting: This module works with other modules to facilitate reporting across all departments. Staff will no longer have to spend time pulling reports from each system.
Business Intelligence (BI): Facilitates the use of business intelligence to make data-driven decisions about the future of the company. Typically, you'll only find the BI module in large ERP packages.
Project management: This module links project activities with company financials to facilitate reporting on project success or failure.
Compliance tracking: Controls your company's compliance with industry regulations. Covers everything related to local legislation, security measures and documentation requirements.
IT Optimization: This module works to optimize the IT structure to keep systems running smoothly.
Asset Management: Aims to manage physical assets, such as real estate, manufacturing equipment, etc.
E-commerce: This module integrates the management of multiple online sales channels with other areas of the ERP.
There is a great variety of ERP systems. That is why it is important to take into account the needs and objectives of the company when purchasing an ERP. The new system will replace your current business management software and facilitate the connection between the Front Office and the Back End. These examples of ERP use demonstrate how it meets the needs of companies of all sizes and shapes.
Examples of the use of an ERP according to the company's needs
Manufacturer wants to streamline operations and reduce costs
If you are a manufacturer who needs to integrate all manufacturing processes, count on an ERP. It will allow you to eliminate data discrepancies and reduce software licensing costs associated with using separate systems for each function.
In this case, it is preferable to start with a material requirements planning or MRP tool, an ERP software designed to solve the problems associated with order tracking. This way, orders are processed from source to delivery and payment in a single system.
SMBs that use a CRM but need more features
Many SMBs operate with a CRM system and, as useful as it is, it is often not enough. Yes, it streamlines sales and marketing, but it can't handle tasks in other departments, such as accounting or operations. Upgrading the infrastructure to an ERP system allows SMBs to add modules for their other business functions and integrate them with their existing CRM.
SMBs looking to implement ERP on a small scale
You have a company and want to start with a single ERP module, for example the CRM. As the company grows you can add additional functionality.
In this situation, it is important to consider that some systems are easier to scale than others. Therefore, it is essential to choose a solution that is flexible and scalable, so that even if you don't acquire all the features at the moment, you have the freedom to add them when you need them.
A company in a niche industry that wants a custom ERP
If you operate in a specialized industry like food and beverage, you're no doubt looking for an ERP that's tailored to your specific needs. Choosing a specialized ERP will save you time in adapting the new system to your environment.
SMBs that want ERP but are concerned about cost
As a small business looking to improve business processes and eliminate data inconsistencies associated with using multiple systems, ERP seems like a logical solution. But, when you consider the costs of implementing it, the expense skyrockets too high.
This is where cloud ERP solutions come into play. Instead of investing in on-premise hardware and software, SMBs can pay a monthly fee for access to the ERP they need, without having to worry about maintenance.
ERP software uses a centralized database to store information from all departments and runs integrated software, so everyone has access to what they need, regardless of their assigned business function.
What makes ERP so complex is that the way it is used in company A, will not be the same as the way it is used in company B. Each implementation is highly customized to the needs of the business, so there are wide variations from industry to industry and company to company.
Examples of the use of an ERP by Area
With any ERP you can choose to integrate any or all of the modules listed below, depending on your needs. Here are some examples of how an ERP can be used depending on the department in which it is used:
Inventory management: Also known as materials management, the inventory module helps measure stock targets, standardize replenishments and track items through serial numbers.
Purchasing: This module manages procurement processes and works closely with the inventory module.
Sales and Marketing: These modules manage sales workflows, ranging from inquiries and quotes to orders and invoicing. With more advanced implementations, it is also possible to track shipments.
Manufacturing: Also known as Production or Engineering, this module aims to streamline manufacturing. It includes product sales planning and forecasting, daily monitoring of production, etc. It is integrated with the inventory module.
Financial Management: This module manages capital, giving you a clearer view of the money flowing in and out of the company. It covers standard accounting transactions, including expenses, balance sheet, tax management, bank reconciliation, etc. It can also generate financial reports for any department.
Customer Relationship Management (CRM): Aims to improve customer service and ARPU. It manages leads, incidents and customer opportunities. Within ERP, it works closely with the sales module to accelerate conversions.
Supply chain management (SCM): This module covers the supply chain, including areas such as purchase order management, process automation and production flow until the item reaches the customer, and vice versa in the case of recalls or returns.
Human resource management (HR): This is personnel-oriented and includes elements such as timesheets, employee records, performance appraisals, payroll systems and job profiles.
Automated reporting: This module works with other modules to facilitate reporting across all departments. Staff will no longer have to spend time pulling reports from each system.
Business Intelligence (BI): Facilitates the use of business intelligence to make data-driven decisions about the future of the company. Typically, you'll only find the BI module in large ERP packages.
Project management: This module links project activities with company financials to facilitate reporting on project success or failure.
Compliance tracking: Controls your company's compliance with industry regulations. Covers everything related to local legislation, security measures and documentation requirements.
IT Optimization: This module works to optimize the IT structure to keep systems running smoothly.
Asset Management: Aims to manage physical assets, such as real estate, manufacturing equipment, etc.
E-commerce: This module integrates the management of multiple online sales channels with other areas of the ERP.
There is a great variety of ERP systems. That is why it is important to take into account the needs and objectives of the company when purchasing an ERP. The new system will replace your current business management software and facilitate the connection between the Front Office and the Back End. These examples of ERP use demonstrate how it meets the needs of companies of all sizes and shapes.
Examples of the use of an ERP according to the company's needs
Manufacturer wants to streamline operations and reduce costs
If you are a manufacturer who needs to integrate all manufacturing processes, count on an ERP. It will allow you to eliminate data discrepancies and reduce software licensing costs associated with using separate systems for each function.
In this case, it is preferable to start with a material requirements planning or MRP tool, an ERP software designed to solve the problems associated with order tracking. This way, orders are processed from source to delivery and payment in a single system.
SMBs that use a CRM but need more features
Many SMBs operate with a CRM system and, as useful as it is, it is often not enough. Yes, it streamlines sales and marketing, but it can't handle tasks in other departments, such as accounting or operations. Upgrading the infrastructure to an ERP system allows SMBs to add modules for their other business functions and integrate them with their existing CRM.
SMBs looking to implement ERP on a small scale
You have a company and want to start with a single ERP module, for example the CRM. As the company grows you can add additional functionality.
In this situation, it is important to consider that some systems are easier to scale than others. Therefore, it is essential to choose a solution that is flexible and scalable, so that even if you don't acquire all the features at the moment, you have the freedom to add them when you need them.
A company in a niche industry that wants a custom ERP
If you operate in a specialized industry like food and beverage, you're no doubt looking for an ERP that's tailored to your specific needs. Choosing a specialized ERP will save you time in adapting the new system to your environment.
SMBs that want ERP but are concerned about cost
As a small business looking to improve business processes and eliminate data inconsistencies associated with using multiple systems, ERP seems like a logical solution. But, when you consider the costs of implementing it, the expense skyrockets too high.
This is where cloud ERP solutions come into play. Instead of investing in on-premise hardware and software, SMBs can pay a monthly fee for access to the ERP they need, without having to worry about maintenance.